Loren Steffy: The price of drilling safely

By Loren Steffy |
January 7, 2011

The day we got the first major sampling of the presidential oil spill commission's findings, I was driving for almost 10 hours.

That gave me plenty of time to reflect on last spring's Gulf of Mexico oil disaster, even as I was contributing to the ultimate cause.

On Wednesday, the commission released one chapter of its upcoming report that casts blame on BP and its contractors on the Macondo well project that blew out last April and killed 11 aboard the Deepwater Horizon rig.

The findings fault BP's lack of oversight and the decision-making of Transocean, the rig's owner, and Halliburton, which handled the cement that was supposed to plug the well. It also faults federal regulators for lax oversight of the well plans and for rubber-stamping BP's frequent revisions to its well design.

Those findings are consistent with the picture that emerged of this disaster during the past eight months.

The federal government disbanded the Mineral Management Service and ousted its leader, an admission of its failed oversight of drilling procedures.

For BP, of course, the disaster is just the latest in a pattern of safety and operating failures that the company has steadfastly refused to acknowledge. So yet another independent investigation into yet another accident on its watch raises questions about BP's operations. The company already is moving to deflect and dismiss those findings, as it has the others.

For the industry, the report is a wake-up call, even if BP's poor decisions and those made by companies in its employ combined to foment disaster in this case.

It's a mistake for other oil companies to dismiss the commission's findings as politically motivated or to cling to its frequent retort that this is solely the result of BP's culture of cutting corners. The report raises serious concerns that last summer's disaster could be repeated, and not just by BP.

Unprepared

The offshore energy business has grown complacent, deluded by its own safety record. The aftermath of the Deepwater Horizon explosion showed us an industry — and a government - unprepared for such a disaster. Oil company executives told Congress their response plan was making sure an accident never happens.

Certainly, diligent operations and vigilance for safety are the best defense against disaster, but that doesn't absolve the industry of planning for the worst-case scenario.

The industry is correct in its fears that new rules are likely to make drilling in the Gulf more expensive, and that's where the report should hit home for the rest of us.

A disconnect

We bristle at gasoline nearing $3 a gallon, and we gape in horror at oil spreading across the waters of the Gulf, as if the two are disconnected.

Yet tighter drilling rules are likely to make some Gulf projects uneconomic, resulting in lower supply and raising concerns about limits on one of the world's most lucrative offshore prospects for new drilling. That, inevitably, will result in higher prices at the pump.

If, as the report warns, this summer's disaster could repeat, what price are we willing to pay to ensure that it doesn't? Four dollars a gallon? Five?

More offshore drilling

In the next decade, we will see more offshore drilling, not less, and we will see it in a host of new areas from the eastern Mediterranean to east Africa to South America - places where a spill the size of the Macondo blowout might quickly fade from the headlines.

The president's commission found systemic flaws in drilling procedures, ones that could extend to many and perhaps all the wells in the Gulf, and maybe to other regions as well. BP, with its questionable safety record, still plans to be active in the Gulf, apparently with the government's blessing.

As Americans, we expect cheap and abundant energy. The lingering question posed by the Macondo disaster is drowned out by the roar of our fuel-injected engines: What about next time?

The industry, the government and certainly BP have changes they need to make.

So do the rest of us, starting with the question of what we're willing to pay to make sure we're prepared if this happens again.